Providers of goods and services expend great efforts in determining how to best price their goods and services. Providers of goods of a commodity nature (sometimes referred to as "parity products") are forced to price their goods at or below similar goods from competitors. That is also the case for providers of services that are of a commodity nature (sometimes referred to as "parity services.") In the case of completely new, proprietary products and services ("non-parity goods/services") provided in competition with commodity products and services, particularly in business settings as opposed to consumer settings, determining the value of the provider's goods and services to the buyer is helpful. If the customer (or potential customer) perceives the pricing model as being too expensive or having unattractive terms, the customer (or potential customer) may opt to look elsewhere or forego the goods/services. The customer's perception of the value of the goods/services is not static, and is influenced by a universe of constantly changing variables. Some businesses base their buying and procurement decisions largely on the lowest price for a commodity that meets the specification of the buyer or the payback period of the investment. Different customers also have different degrees of risk aversion. While some customers are willing to make more risky procurement decisions in order to maximize profitability, other customers are highly risk averse, and prefer avoiding risk if possible, even if this results in decreased profitability. All of these factors add complexity to the pricing process.
Traditionally, pricing of commodity goods and services in a business setting is arrived at by a bidding process and pricing of completely new, proprietary products and services is arrived at by negotiations between the provider of the goods and services and the customer. Further, traditionally, pricing of completely new, proprietary products and services in combination with commodity products and services is arrived at by negotiations between the provider and customer. After some back and forth, hopefully a meeting of the minds will result. Unfortunately, rather than building a sense of cooperation between the provider and customer, sometimes these negotiations can engender negative sentiments, particular if the transaction is not considered completely fair to both sides. Changing market conditions can force the seller and buyer to repeatedly reevaluate the pricing and other terms.
Accordingly, there remains a need for a pricing model and mechanism that assists the provider and customer at arriving at a mutually agreeable pricing structure that is flexible and responsive to market conditions, and that helps the parties establish equitable pricing of new goods and/or services in a manner that engenders a mutual feeling of cooperation and partnership. There is a further need for a pricing model that appeals to risk averse customers that desire a pricing structure that guarantees the customer that the decision to obtain goods and/or services from a provider will result in tangible and ascertainable economic benefits to the customer.